Gebhardt redevelopment (copy)

Gebhardt Development wants to build up to 13 stories tall for its proposed mixed-use project on the 800 block of East Washington Avenue. 

The news that Metcalfe’s Market will not anchor a long-anticipated redevelopment of the 800 block of East Washington Avenue has left many east-siders dismayed.

“It’s safe to say a lot of people were really bummed,” says Joe Lusson, president of the Tenney-Lapham Neighborhood Association. “Just a couple of weeks ago I had somebody tell me how excited they were about Metcalfe’s coming in.”

Now, it’s back to square one for Gebhardt Development, which has a contract with the city of Madison to purchase the site on the north side of the block for $3.15 million. That agreement is good until early 2015 but does require a 50,000 square foot grocery be part of the development.

City officials, including District 2 Ald. Ledell Zellers, will join with representatives from Gebhardt in a meeting Wednesday night at 7 p.m. at the Tenney Park shelter to provide an update to the neighborhood.

“The land sale is still on,” says city economic development director Aaron Olver. “The agreement requires Gebhardt to include a 50,000 square foot grocery as a component of the project, but it does not specify who the grocer has to be. I understand they are talking to other potential grocery partners and still intend to move forward with both the project and a grocery store.”

Landing another store for that high-profile site shouldn’t be too difficult, says Brandon Scholz, president of the Wisconsin Grocers Association.

“It depends on what they are offering in terms of space and lease arrangements,” he says. “There are a gazillion other business factors before you decide where to put the ice cream.”

And despite the recent store openings in the past year — Hy-Vee at Westgate, Metcalfe’s taking over Cub Foods at West Towne, another Hy-Vee in the works off County PD and Verona Road — Scholz doesn’t see Madison as oversaturated with grocery operators.

“I’d say Sun Prairie is probably the only market in this region that is over-stored,” he says.

Metcalfe’s owners have yet to offer any reason for pulling out of the 800 East Wash deal, although some have speculated it was related to the $3 million it invested in the West Towne location.

Lusson says the neighborhood was excited about Metcalfe’s because of its reputation for local foods and its reputation for working with area suppliers, noting that many in Tenney-Lapham already drive to Metcalfe’s flagship store at Hilldale. He’s not sure a national chain or “big box” would generate the same kind of buzz.

“All I know is there is great access on East Washington and there would be lots of customers,” he says. “You don’t need to be a marketing expert to know there is a food desert east of the Capitol.”

And with the site again open for negotiation, there has been plenty of speculation about which grocery might be interested.

Some of the names tossed around include Fresh Market Madison, Trader Joe’s and Whole Foods, all which already operate here, along with Fresh Thyme Farmers Market of St. Louis or Sendick's Food Market of Milwaukee.

The site is part of the former Don Miller auto dealership the city purchased in 2010 for $5.8 million. Gebhardt earlier bought 1.5 acres on the north side of the 700 block of East Washington and built the 12-story “Constellation” mixed-use apartment project which is now open.

The first phase on the 800 block was to include a grocery, anywhere from 175 to 240 residential units and a 350-space parking garage. Phase two includes 22 condominiums, 65,000 square feet of commercial space and another 175 parking slots.

Scholz says the only issue might be finding a grocery willing to build a 50,000 square foot store, which is on the small side. The new Hy-Vee at Westgate, for example, is 80,000 square feet, slightly smaller than the east-side store.

“Fifty thousand square feet is not all that big,” says Scholz.

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